The Affordable Care Act has created angst among health care workers and administrators, not because big changes are coming, but because the impacts of those changes and their accompanying rules are not yet clear. For administrators, this level of uncertainty makes planning seem nearly impossible. Yet, healthcare organizations such as Mayo Clinic and Thedacare are currently developing robust plans for tomorrow, streamlining existing workflows, and delivering better outcomes in care—all while cutting costs, increasing cash flow, and growing the bottom line. How? Lean Six Sigma.

A Transformational Approach

Lean Six Sigma improves hospital operations with data-supported decision making. The goal is to drive continuous improvement throughout the organization, and in a way that aligns with the hospital’s strategic plan.

In health care, Lean Six Sigma focuses on both the process (workflow) and the service itself. When implemented properly, these practices train health care teams to react and adjust to changes efficiently, and even proactively create solutions to future problems. Typically, Lean Six Sigma projects yield between three and ten times the health care provider’s investment, as well as a 50% improvement in quality of care.

Financial Gains from Lean Six Sigma Result from:

n Eliminating rework, materials, and inventory

n Avoiding or reworking problematic processes

n Enhancing productivity and patient care quality

n Improving patient flow and cash flow

Lean Six Sigma methodologies make delivering and planning for high-quality care possible, even in the face of great change. Further, these practices prepare hospitals and staff for the coming changes while incorporating existing requirements from Medicare/Medicaid, ACO, avoidable adverse events, and much more.

To Read a Success Story, press the Read More button below:

Emergency Department Revenue Cycle Improvement: A Success Story

Hospital administrators noticed defects in patient medical and registration entries, which led to excessive rework from auxiliary, medical records, and billing department employees.

A group of the hospital’s medical, financial, and stakeholder decision makers worked with Lean Six Sigma experts to set a goal of reducing defects and time spent by 50%. They divided into two teams to separately address 1) registration-related account processing issues and 2) medical information-related account processing issues.

Each team collected data from patient registration and medical information workflows for 5 days. Auxiliary departments (radiology, clinical lab, pharmacy, and respiratory therapy) also tracked information they received from the ER. The data revealed that for every 100 minutes spent processing patient accounts, 55 were for rework. Also, for every 100 patient accounts processed, 75 had defective information, which required rework.

Mapping the Value Stream

Working with Lean Six Sigma experts, the teams developed a Value Stream Map to detail the steps involved in registering a patient, from arriving in the ER to mailing the final bill for services. The Value Stream Map served as a point of reference, helping the teams identify waste, long wait times, and defects in their workflow. They learned the causes of waste were 1) insufficient software training and 2) no established “standard operating procedure” for entering patient data into the software program.

A Clear Solution

The hospital team worked with Lean Six Sigma Experts, as well as the hospital’s technology staff, to create an action plan for developing a software training curriculum and standard operating procedures for employees to follow during registration, billing, and other patient data entries.

Measurable Results

Minutes of rework were reduced by 75% and the number of defects was reduced more than threefold. As a direct result of these Lean Six Sigma improvements, the hospital saved more than $175,000 in soft dollars or productivity. Further, updates to medical records, which used to take three days, now took only one. This greatly improved quality of care for patients who required follow-up treatment after the ER. This project also led to the formation of a software information team of nurses to address changing medical codes and software applications on a regular basis.

Doing More with Less

Hospitals and clinical health care settings can reap big rewards from a wide variety of projects. Lean Six Sigma is especially helpful for those ongoing, hard-to-diagnose problems that whittle away at hospital revenue, patient care performance, and caregiver morale.

Lean Six Sigma Projects in Healthcare

n Increase admissions

n Enhance workflow efficiency

n Reduce poor use of materials

n Minimize deficiencies

n Improve planning and scheduling of human resources

n Make better use of facilities and equipment

About WillowTree Advisors, LLC

We are a woman-owned, small business specializing organizational transformations. Headquartered in Denver with services offered across the country, our team comprises over 40 professional advisors and technology experts with significant experience in change management, Lean and Six Sigma improvement, leadership development, and team building. We have worked with state, local, and federal agencies, and private firms, and in industries such as health care, high tech, manufacturing, aviation and transportation. We incorporate best practices from the health care sector and beyond, for a solid, cross-industry solution.

Our team members hold numerous certifications—Six Sigma, Lean, PMP ITIL, Certified Purchasing Manager, and others—and work with business and quality methodologies including MBO and TQM management strategies. Many of us are university instructors in quality management, Six Sigma, Lean business transformation, and purchasing/supply chain management. We also volunteer for Rocky Mountain Performance Excellence (RMPEx) and as National Baldrige Award examiners.

The September 30, 2011 edition of Manufacturing and Technology News magazine presented an article entitled, Lean and Six Sigma Are Not Leading To Breakthroughs In Corporate Performance. This article (the result of a survey of 100 business executives conducted by Alix Partners, a business consulting firm) highlighted some problems with Lean and Six Sigma implementations, including:

n 70% of respondents reported a less than 5% improvement in manufacturing costs as a result of Lean.

n 60% of respondents said their previous Lean improvements were not sustainable.

n Only 17% of respondents reported seeking long-term culture change in their organization.

Alix Partners made observations about the survey that are summarized here:

n Most companies are getting a poor return on their investment in Lean and Six Sigma.

n Companies are far too focused on implementing Lean tools and processes rather than on basic execution.

n Organizations need to dramatically rethink their Lean strategies by focusing on cash and finding the biggest opportunity to improve, and then deciding which Lean tool(s) will help them achieve that result.

n Company Leadership Teams must take responsibility for the Lean implementation, rather than trying to push this responsibility down to the Lean facilitator.

This data supported a report completed by Industry Week magazine in 2007 that reported the following Lean results from American business:

As noted in the figure above, 74% of American businesses that indicated they were using Lean as their business improvement activity, reported "little" or "no progress" with their Lean implementations. Toyota says this number is 70%.

For the "little" or "no progress" organizations, Lean is viewed as an appendage or an add-on; something that is done in addition to our normal busy schedules, not as the operating system by which we run the organization and achieve our business goals. This lack of progress leaves organizations saying, "We're different, Lean doesn't work for us," thereby placing the lack of results on Lean itself rather than the organization's Lean implementation plan.

To be successful with Lean, we must view and acknowledge Lean as our "business operating system" by which we will run the entire organization and achieve the desired business results. This business operating system includes the establishment of a Lean Culture.

Lean is not just a set of Lean tools used on the organization--for example, 5S or Kaizen Events. Achieving the "desired results" means being focused on the three key metrics by which all "for profit" companies are measured: profit, cash flow, and revenue growth. Organizations must establish linkage between the desired business results and Lean activities using a technique called Policy Deployment. Policy Deployment also establishes the framework of a Lean Culture.

In Policy Deployment, the Lean tools are only deployed into the organization when we understand how using 5S, Kanbans, or other Lean tools will help eliminate the wasteful activities that are preventing us from achieving the desired business results.

The idea of adopting Lean as a business operating system in U.S. organizations has been very difficult to accomplish because it is rarely understood as an absolute requirement to a successful implementation. This has resulted in an extremely low level of Lean success as measured by either the ability to achieve "World Class" (globally competitive) status, or significant improvement, for an organization's Lean activities.

Experience has shown that adopting Lean requires, right from the beginning, a strong "sense of urgency" and commitment from the Leadership Team to the organizational change required to successfully implement Lean. This commitment to change must include the area where generally the greatest change must occur--the Leadership Team.

DENVER (April 6, 2012) – WillowTree Advisors (WTA), a business and change management consulting firm, has been awarded a Colorado statewide Lean Six Sigma master services agreement for a series of projects to introduce and manage business-efficiency methodology to achieve improvement of business processes within Colorado State government.

The State of Colorado’s Lean Initiative is based on the fundamental idea that the State can develop a sustainable Lean culture. The purpose of this program is to generate a high level of acceptance for implementation of Lean business efficiency principles as well as identify opportunities to implement Lean principles, plan and host Lean events and identify waste and inefficiencies to create savings.

Governor Hickenlooper: “We understand that government is not a business. Still, we need to apply best practices from successful companies where they make sense. That is why we initiated the LEAN program in almost every state agency, where employee teams are now actively identifying waste and inefficiency to create savings.”

“I am extremely proud that WillowTree Advisors has been recognized as a provider of Lean Six Sigma services for the State of Colorado. WillowTree Advisors is headquartered in Denver and it makes us very proud to work for the state to help improve our government. ” said Kathryn Douglass, WillowTree Advisor managing partner. “We strongly support Governor Hickenlooper’s Lean initiative and are excited to help the agencies improve and enhance the services they provide to the public.”

Douglass launched WillowTree Advisors in 2009 and has 25 years of program management, executive leadership, technology and business operations experience. Her team’s value proposition rests on the delivery of big firm results on a cost effective and flexible platform.

About WillowTree Advisors

WillowTree Advisors (WTA) is a woman-owned, small business enterprise that focuses on helping public and private enterprises improve their services, reduce costs and transform their organizations. Founded in 2009, WTA’s value proposition rests on the delivery of big firm results on a cost effective and flexible platform. WTA has been recognized as a provider of consulting services to the Federal Government, and is currently approved on the GSA MOBIS Schedule.

The firm is also a certified woman-owned small business, approved by the Women’s Business Enterprise National Council (WBENC) since 2010. WTA is a member of WBEC-West, Colorado Technology Association, the Association for Corporate Growth and MPEx.

Employing Lean and Six Sigma techniques, WillowTree offers a way to rapidly assess any back office operation (e.g. IT, HR, F&A, procurement, customer service and sales) and identify improvements that will make the organization more effective and efficient.

“If your organization is feeling sluggish, needs to get rid of redundant processes or has disengaged employees, it’s time to make a change,” said Kathryn Douglass, WillowTree Advisor managing partner. “All businesses need to take a look at their operations on a regular basis to determine if improvements need to be made, technologies need to be updated and organizations and delivery models reviewed and adjusted.”

The WillowTree Advisors team addresses business needs, eliminates waste and creates swift business value and change. They help organizations lead a successful transformation by linking refreshed activities to the business strategy, transforming approaches for customized environment, and developing an overall approach to managing change in the workplace.

“The application of Lean techniques to business processes can save time, reduce waste and eliminate costs – while improving customer and employee satisfaction,” said Douglass.

About WillowTree Advisors

WillowTree Advisors (WTA) is a woman owned, small business enterprise that focuses on helping public and private enterprises improve their services, reduce costs and transform their organizations. Founded in 2009, WTA’s value proposition rests on the delivery of big firm results on a cost effective and flexible platform.

WTA has been recognized as a provider of consulting services to the Federal Government, and is currently approved on the GSA MOBIS Schedule. The firm is also a certified woman-owned small business, approved by the Women’s Business Enterprise National Council (WBENC) since 2010. WTA is a member of WBEC-West, Colorado Technology Association, the Association for Corporate Growth and MPEx.

Closing the Loop in your Methodology

Whether adhering to the tenets of Lean Manufacturing, Six Sigma, Demand Flow Technology, or Theory of Constraints, improvement initiatives need to have a feedback mechanism. Academics tell us that there are four management functions: planning, organizing, leading and controlling. At the nexus of leading and controlling lies continuous improvement. To lead the organization to the next level of performance presumes that one understands current performance and has the tools – the levers to push – that will change the current process. Understanding and changing the process is control. To control a system is to manage it long term, and to accomplish this, feedback is necessary.

A control or feedback loop is central to any self-regulating and continuously improving system. You may have heard it described as thePDCA Cycle, or Plan, Do, Check, Act. I actually prefer a variant: Plan, Do, Check, Adjust. It implies that corrective action or continuous improvement is part of the cycle. Since PDCA may be a bit removed from the day-to-day, let’s try to apply it to an operations improvement project environment. To do this, we can expand the PDCA cycle into a more actionable, effective set of steps:

Determine what and how to measure – this is a topic unto itself; I’ll expand on this in the future

Measure baselines and set goals – understanding how much improvement is possible takes practice

Implement monitoring mechanisms while conducting the project – make measurement part of the future state process

Assign ownership to processes and their metrics – process owners are not meant to enforce compliance, however*

Compare performance to the goal and reset the bar – remember that ‘kaizen’ means continuous improvement

*An important note on managing process improvement long term: creating another report and assigning a supervisor or manager to monitor it is not the same as control. Don’t miss this. We have seen world-class Six Sigmashops run projects that err by assigning someone the responsibility for ensuring that new, better results are maintained. It’s not an effective ‘Control’ phase of a project. In any organization, especially ones that are continuously improving, supervisors and managers have only so much attention span. Gains are quickly lost if they must rely solely on a person’s attention for monitoring compliance – self-regulating processes are vital to true stair-step improvements.

Ideally, process control is achieved through visual management techniques such as poka yoke. In many corporate or administrative environments, management reports and scorecards are the best tool we have. This means that with process change come changes to our management practices. When the project is complete, a new process is in place, and new measurements have become part of the management process without adding to the management burden.